Thursday, August 24, 2006

By ELAINE KURTENBACH AP Business WriterAP Photo/EUGENE HOSHIKOSHANGHAI, China (AP) -- Capitalist icon Wal-Mart, the world's biggest retailer, now has its first communist party branch.The party branch, a Communist Youth League branch and a trade union were set up earlier this month at the outlet in the northeastern rust belt city of Shenyang, a staffer in the store's communications department said, confirming Chinese media reports.Like many media-shy Chinese, she gave only her surname, Liu. She would not discuss further details.Repeated phone calls to the public relations department of Wal-Mart's China headquarters in the southern city of Shenzhen went unanswered Thursday afternoon.

President Hu Jintao, who heads the ruling communist party, reportedly prompted China's state-sanctioned labor group to launch a campaign to set up party-controlled unions in Wal-Mart branches. The retailer resisted for two years before employees in the southeastern city of Quanzhou successfully voted to set up a union in late July.Wal-Mart has 60 stores in 30 cities in China and more than 30,000 Chinese employees, including 700 in Shenyang, according to the official Xinhua News Agency, which reported the news of the new party branch as an "urgent."It wasn't immediately clear whether the party branch had an office in the store.Since July, employees at at least 16 other Wal-Marts in China also have formed unions, according to the All-China Federation of Trade Unions, the umbrella group for unions permitted by the communist government.

Wal-Mart Stores Inc., based in Bentonville, Ark., has fought efforts to form unions elsewhere in its worldwide operations. But it said this month it would cooperate with the ACFTU to organize its Chinese employees.The move to increase party influence in foreign invested companies comes at a time when China is pushing to unionize employees at 60 percent of China's foreign companies.Unions in China usually represent the workforce of a single company or outlet, rather than a whole industry. China does not allow independent labor organizations.Once a thriving industrial hub of China's planned economy, where factory workers enjoyed elite status and cradle-to-grave benefits, Shenyang has seen massive layoffs in recent years.